United States District Court, E.D. California
many Americans facing foreclosure in the aftermath of the
2008 mortgage crisis, Ms. Fernani Narvasa sought to revisit
and modify the terms of the mortgage she had on her
California home. When U.S. Bancorp (Bancorp), a national
bank, denied her request to modify, she sought a statement of
the bank’s net present value (NPV) calculation with
respect to her home, a tool used to assess the soundness of
economic investments. Bancorp refused to supply Ms. Narvasa
with this statement, saying it never provides such
information. In response, Ms. Narvasa filed suit in this
court, alleging Bancorp’s refusal to provide an NPV
calculation statement violated various state laws. Compl.,
ECF No. 1. Bancorp disagrees and moves to dismiss Ms.
Narvasa’s complaint. Mot., ECF No. 7.
hearing on Bancorp’s motion on February 29, 2016,
Arasto Farsad appeared for Ms. Narvasa and Robert McWhorter
appeared for Bancorp. ECF No. 11. As discussed below,
Bancorp’s motion is GRANTED, without leave to amend.
Ms. Narvasa is ordered to show cause why her third claim for
breach of the implied covenant of good faith and fair dealing
should not also be dismissed.
PROCEDURAL HISTORY AND FACTUAL BACKGROUND
November 14, 2015, Ms. Narvasa filed suit in this court,
asserting the following claims: (1) violation of California
Civil Code § 2923.6(f)(3); (2) violation of California
Civil Code § 2923.7(b); (3) breach of the implied
covenant of good faith and fair dealing; (4) violation of
California’s Unfair Competition Law (UCL), Cal. Bus.
& Prof. Code §§ 17200, et seq.; and
(5) negligence. See generally Compl. Ms.
Narvasa’s first two claims are based on
California’s Homeowner Bill of Rights (HBOR), a statute
that provides borrowers with a private right of action to
challenge certain material violations of HBOR. Penermon
v. Wells Fargo Bank, N.A., 47 F.Supp.3d 982, 993 n.2
(N.D. Cal. 2014).
filed the pending motion to dismiss the complaint on January
19, 2016. Ms. Narvasa filed an opposition on February 8,
Opp’n, ECF No. 8, and Bancorp replied on February 18,
Reply, ECF No. 9.
Narvasa’s claims arise from the following allegations,
and from documents attached to the complaint and incorporated
by reference. See Fed. R. Civ. P. 10(c); Davis
v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1160 (9th Cir.
2012). Ms. Narvasa and her husband have lived in Elk Grove,
California since March 20, 2001. Compl. ¶ 8. Ms. Narvasa
holds a primary mortgage loan on her residence
“currently serviced by” Bancorp. Compl. at 2.
September 3, 2015, Ms. Narvasa submitted a completed loan
modification application to Bancorp. Id. ¶ 9.
On October 15, 2015, Bancorp sent Ms. Narvasa a formal
letter, dated October 5, denying her application.
Id. ¶ 11. In the letter, Bancorp explained it
explored fifteen different “loss mitigation programs,
” but could not approve Ms. Narvasa’s application
by offering her any one of them. Compl. Ex. 1, ECF No. 1.
Bancorp based its determination on “the information
[Ms. Narvasa] provided” and “applicable investor
guidelines” for each loss mitigation program.
Id. The guidelines for each program were not
provided in the denial letter. See id.
Narvasa alleges Bancorp’s denial was based on an
“NPV failure.” Compl. ¶ 11. On October 26,
2015, through her counsel, she contacted Bancorp to discuss
the denial letter and to request a copy of the NPV
calculations used to assess her application. Id.
¶ 12. Bancorp refused to provide a copy, stating it
“did not need to provide any of the NPV calculations
used, ” id., and that it “never
provide[s] such information, ” id.
may move to dismiss for “failure to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
The motion may be granted only if the complaint lacks a
“cognizable legal theory” or if its factual
allegations do not support a cognizable legal theory.
Hartmann v. Cal. Dep’t of Corr. & Rehab.,
707 F.3d 1114, 1122 (9th Cir. 2013). The court assumes these
factual allegations are true and draws reasonable inferences
from them. Ashcroft v. Iqbal, 556 U.S. 662, 678
complaint need contain only a “short and plain
statement of the claim showing that the pleader is entitled
to relief, ” Fed.R.Civ.P. 8(a)(2), not “detailed
factual allegations, ” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). But this rule demands
more than unadorned accusations; “sufficient factual
matter” must make the claim at least plausible.
Iqbal, 556 U.S. at 678. In the same vein,
conclusory or formulaic recitations of a cause’s
elements do not alone suffice. Id. (quoting
Twombly, 550 U.S. at 555). Evaluation under Rule
12(b)(6) is a context-specific task drawing on
“judicial experience and common sense.”
Id. at 679.
ruling on a motion to dismiss, the court is not limited by
the plaintiff’s allegations if the complaint, as here,
is accompanied by attached documents. Knievel v.
ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Such
documents become a part of the complaint and may be
considered in considering the defendant’s motion to
seeks to dismiss Ms. Narvasa’s complaint, contending
several of her claims are preempted and, alternatively, her
claims lack merit. Mot. at 10-25. Ms. Narvasa contends her
claims are not preempted and they otherwise have merit.
Opp’n at 10-25. The court first addresses preemption,
which is dispositive.
contends four of Ms. Narvasa’s claims are preempted by
either the federal National Bank Act (NBA), 12 U.S.C. §
24, or the Home Owners’ Loan Act (HOLA), 12 U.S.C.
§§ 1461 et seq. The four claims,
identified by number assigned in the complaint, are those
based on (1) section 2923.6(f)(3); (2) section 2923.7(b); (4)
the California UCL; and (5) negligence. Mot. at 10.
Defendants do not contend Ms. Narvasa’s third claim,
breach of the implied covenant of good faith and fair
dealing, is preempted. See generally Id. Ms. Narvasa
contends none of her claims are preempted. Opp’n at 10.
The court first briefly reviews conflict preemption and field
preemption, the two types of implied preemption implicated by
the NBA and HOLA, respectively, and then proceeds to a
Conflict Preemption ...